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Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
 On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Although the report showed a net profit increase of IDR22 trillion (tn), a 53% rise from 2022, the Institute for Energy Economics and Financial Analysis (IEEFA) calculates that PLN would have recorded a substantial loss of IDR120tn without subsidies and compensations from the Government of Indonesia (GOI).
At first glance, PLN’s cash reserves increased by 9% for the fiscal year 2023, and its electricity sales rose around 7%. This increase in sales contributed the most to PLN’s income growth, amounting to IDR22.2tn. However, despite the improved performance and positive figures, there are underlying red flags.
Despite increased cash reserves, PLN’s liquidity ratio (0.92), quick ratio (0.79), and cash ratio (0.39) were all below 1.00. These figures indicate that the utility is struggling to meet its urgent payment obligations with cash or current assets.
PLN’s financial performance heavily depends on GOI’s subsidies and compensations, which have risen by 16.4% from IDR123tn in 2022 to IDR143tn in 2023. However, these incremental increases could halt in 2025. Discussions at the Ministry of Finance are underway to reduce PLN’s subsidies and compensations under the new administration's programs and policies.
An imminent solution for PLN's financial independence is required. PLN's fiscal potential can be unlocked with minimal GOI assistance by improving efficiency, particularly by reducing operating costs through the adoption of renewables.
Reducing cost and volatility via renewables
The Basic Cost of Providing Electricity (BPP) is arguably the main factor determining electricity costs, which are then translated into tariffs paid by customers. Any increase in BPP adds to the GOI’s financial burden.
Since 2020, coal and gas purchase costs have increased significantly. In 2023, purchased electricity from coal and gas contributed to a 14% increase in operational expenses and accounted for 63% of total operating costs. On average, PLN spent around US$4-5 cents per kilowatt hour (¢/kWh) for coal purchases, almost 40% higher than in 2020.
Additionally, PLN’s exposure to US$-denominated coal prices requires reconsideration. Despite the GOI's coal price cap, PLN has struggled with coal price fluctuations due to exchange rate changes. While purchases are denominated in US$, PLN’s tariff collections are in Indonesian rupiahs.
Apart from the base fuel purchasing costs, PLN also had to factor in shipping and plant maintenance costs. As coal-fired power plants age, they lose efficiency and require more coal to produce each kilowatt hour (kWh) of electricity.
Considering the difficulty in reducing purchased electricity costs and renegotiating power purchase agreements with independent power producers, PLN should accelerate the transition from fossil fuel-based energy to avoid price volatility.
Renewable energy sources are low-cost to operate compared to fossil fuel power plants. Furthermore, IEEFA’s recent report has shown that the levelized cost of electricity is around US$4.78¢/kWh for solar and US$4.77¢/kWh for wind. In comparison, coal costs around US$6.5¢/kWh, which is at least US$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
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- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- MS Steel International - UAE
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
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